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FTC moves to block Microsoft’s acquisition of Activision

The Federal Trade Commission asked a court to temporarily block Microsoft’s acquisition of Activision Blizzard. It’s seeking to halt the deal from closing before the government’s case against the $69 billion deal is heard.

The FTC said Microsoft and Activision had signaled the deal could close as soon as Friday and asked a federal judge to block any final agreement before the end of June 15th.

According to the Commission, the deal, which would be the largest for Microsoft and the largest in the video game industry’s history, would give Microsoft the “ability and increased incentive to withhold or degrade Activision’s content in ways that substantially lessen competition.”

US authorities believe that without action by a judge, the combined firm “could alter Activision’s operations and business plans” and allow the software giant to access sensitive business information.

The FTC, which enforces antitrust law, has already asked an in-house administrative judge to block the transaction on antitrust grounds in early December, arguing it would give Microsoft’s Xbox exclusive access to Activision games, leaving Nintendo consoles and Sony Group Corp’s PlayStation out in the cold.

Microsoft’s bid to acquire the “Call of Duty” video game maker in a $69 billion deal was approved by the EU in May. Still, British competition authorities blocked the takeover in April.

“We welcome the opportunity to present our case in federal court,” said Microsoft president Brad Smith. Activision did not comment.

Microsoft has said the deal would benefit gamers and gaming companies, offering to sign a legally binding consent decree with the FTC to provide “Call of Duty” games to rivals, including Sony, for a decade. When announcing the deal in January 2022, Microsoft said they expected it would close in its 2023 fiscal year, which ends in June.

An FTC spokeswoman said: “In light of that, and public reporting that Microsoft and Activision Blizzard are considering closing their deal imminently, we have filed a request for a temporary restraining order to prevent them from closing while the review continues.”

The case reflects the muscular approach to antitrust enforcement taken by the administration of US President Joe Biden.

But antitrust experts say the FTC faces an uphill battle to convince a judge to block the deal because of voluntary concessions offered by Microsoft to allay fears it could dominate the gaming market.

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